United Airlines 2010 Annual Report Download - page 167

Accrual Activity
Activity related to the accruals for severance and medical costs and future lease payments on permanently
grounded aircraft and unused facilities is as follows (in millions):
Severance/
Medical Costs
Permanently
Grounded
Aircraft
Unused
Facilities
UAL (a)
Balance at December 31, 2007 .................................... $— $— $—
Accrual ...................................................... 106 20 —
Payments .................................................... (25) (4) —
Balance At December 31, 2008 ................................... 81 16 —
Accrual ...................................................... 33 87 —
Payments .................................................... (69) (20) —
Balance at December 31, 2009 .................................... 45 83 —
Liability assumed due to Merger, October 1, 2010 .................... 3 — 33
Accrual ...................................................... 155 (3) —
Payments .................................................... (101) (39) (26)
Balance at December 31, 2010 .................................... $102 $ 41 $ 7
United (a)
Balance at December 31, 2009 .................................... $ 45 $ 83 $—
Accrual ...................................................... 74 (3) —
Payments .................................................... (77) (39) —
Balance at December 31, 2010 .................................... $ 42 $ 41 $—
Continental
Balance at December 31, 2007 .................................... $— $— $ 8
Accrual ...................................................... 34 14 14
Payments .................................................... (6) (4) (2)
Balance At December 31, 2008 ................................... 28 10 20
Accrual ...................................................... 5 1 10
Payments .................................................... (19) (9) (4)
Balance at December 31, 2009 .................................... 14 2 26
Accrual (b) ................................................... 84 (1) 9
Payments (b) .................................................. (38) (1) (28)
Balance at December 31, 2010 .................................... $ 60 $— $ 7
(a) United amounts for 2009 and 2008 are the same as the UAL amounts disclosed above.
(b) Continental accrual and payment amounts for 2010 represent both Predecessor and Successor periods. Total accrual and
payments in the Predecessor period were $11 million and $17 million, respectively. Total accrual and payments in the
Successor period were $81 million and $50 million, respectively.
The Company’s accrual and payment activity in 2010 is primarily related to severance and other
compensation expense associated with the Merger. The expected total salary-related expense is reflected in the
2010 accrual and is expected to be paid by 2011. The UAL and United accrual activity in 2009 and 2008
primarily relates to the UAL and United operational plans that included a fleet retirement of 100 aircraft and
headcount reduction to match the decrease in operations. Substantially all of the expense associated with these
plans was expensed and paid in 2008 and 2009, except for minor amounts of healthcare coverage to separated
employees and future rent on permanently grounded aircraft.
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